Protect Your Trademarks

Each year, toy companies pour billions into advertising campaigns to place products in front of store buyers, parents and kids. Unfortunately, the "dividends" from these investments often include competitors trying to ride on the coattails of their hot products—often by adopting similar names.

When competition results in trademark infringement, one of the first questions companies ask their lawyers is, "What can we get if our trademark is infringed?" The usual answer is "likely just an injunction." In other words, if you win, you will have stopped the bad guy from using the name of your product. But companies are often surprised to learn that, frequently, that is all a successful trademark owner recovers. No doubt, an injunction is valuable. But is there more? What about damages?

For a company to be awarded damages from an infringer, courts require a trademark owner to prove "actual confusion" about its products. This is a higher legal standard than "likelihood of confusion," which cannot be proved by the results of the consumer surveys often conducted in trademark cases. In fact, "actual confusion" calls for concrete proof that purchasers or potential purchasers in the marketplace were actually confused about who was the source of the infringer's products, or about whether the trademark owner in some way approved of, or was affiliated with, the infringer.

What can a trademark owner do to increase the chances of recovering damages in litigation and recoup some of its investment? In short, implement internal procedures in your business for documenting consumer's "actual confusion." Instruct sales and marketing personnel, customer service representatives, and anyone else that has direct contact with your customers to create records of any reported confusion, obtaining key details such as who was confused, the consumer's name and phone number, a list of which products were involved, the timing of the incident and the reason for the confusion. Was the consumer confused due to the similar names or packaging of the products? Or was it due to other factors not related to the trademarks involved? Without such details, confusion in the marketplace will not pass muster in court.

These guidelines can help a company substantially increase the value of its trademarks. And armed with the evidence developed by these practices, your counsel will have ammunition to pursue damages and beat the bad guys.